US stocks experienced declines as Brent crude oil neared $100 a barrel, driven by escalating tensions in the Middle East and attacks on Saudi Arabian energy facilities. This surge in oil prices intensified worries about inflation, leading money markets to price in over a 50% chance of a Federal Reserve interest rate increase this month. Despite a rally in chipmakers, the S&P 500 fell for a second consecutive session.
Futures for the S&P 500 were set to open 0.27% lower, while the Dow Jones Industrial Average futures dropped 0.83%. The Nasdaq Composite futures, however, showed a slight gain of 0.02%. During the first hour of trading after the holiday weekend, the Dow dropped 1.21%, the S&P 500 fell 0.49%, and the Nasdaq Composite decreased by 0.52%. Brent crude jumped 1.32% to $98.28 a barrel, reaching a six-week high, before paring some gains.
Asian chip stocks were expected to open higher due to sustained investor interest in artificial intelligence, with South Korean equity-index futures pointing higher after the Philadelphia Semiconductor Index (SOX) gained 1.3% in New York. However, broader Asian markets faced pressure from the Middle East hostilities. Investors are now keenly awaiting key inflation data later this week, which could be decisive for the Federal Reserve's policy decisions.
